The present disclosure relates generally to transaction cards, and more particularly, to a secure package for transaction cards and to a method of activating the same. The secure card package and method of activating the same may be used to solve the problem of “skimming” of transaction cards.
One type of transaction card is commonly known as a “gift card.” A gift card typically is the size and shape of a conventional credit card and includes a magnetic stripe. The magnetic stripe is encoded with data, which includes a unique account number.
The gift card has a monetary value associated with it, which is stored in a database record corresponding to the gift card. A holder of the gift card can use it to purchase goods and/or services, immediately or over time, up to the monetary value of the gift card. As the holder uses the gift card or adds additional value to it, the associated monetary value is updated in the database record.
It has become common for retailers to display gift cards in their store for purchase by customers. The gift cards typically displayed at this point of sale are inactive so that they cannot be used to purchase goods and/or services. This prevents use of a gift card for which the retailer has not received payment.
To activate the gift card so that it can be used for purchases, a customer brings the gift card to a cashier in the store and pays for it. The cashier swipes the gift card through a point of sale (POS) terminal, which includes a card reader. The card reader reads the data stored on the magnetic stripe (e.g., the account number). The POS terminal communicates the data to a host, which updates the database record corresponding to the gift card to indicate that it is active. The monetary value stored in the database record and associated with the gift card may then be used.
The act of producing an unauthorized copy of a gift card from an original gift card—commonly known as “skimming”—is a serious problem for retailers. Skimming results in millions of dollars of lost value stored on gift cards, if not more.
To skim a gift card, an unscrupulous person removes two inactive gift cards, for example, from a retail location or warehouse. Using a relatively inexpensive and readily available card reader and encoder (“reader/encoder”), the unscrupulous person copies the data from the magnetic stripe of one inactive gift card to the other. The two gift cards thus include the same data encoded on the magnetic stripe and may be identical in all other respects.
One of the gift cards is then returned to the appropriate location, such as the place in the retail store from which it was removed. The unscrupulous person may mark the original gift card in some fashion so that he/she will know when it has been activated.
An unsuspecting customer later purchases the gift card in the conventional manner and it is activated as described above. Thus, the inactive gift card becomes active, with the monetary value associated therewith able to be used at the present time, or most likely, at a time in the future.
The unscrupulous person, having the unauthorized copy of the now active gift card, purchases goods and/or services thereby depleting much, if not all, of the value associated with the gift card. When the unsuspecting customer attempts to use the gift card, he/she will be told it has no associated value or has a smaller value than thought.
In most cases, the retailer is able to verify that the customer did not use the value associated with the gift card and, in the interest of customer service, restores the value to the customer. In some cases, however, the customer loses the entire value because he/she does not have a receipt for the original purchase. Thus, both retailers and customers suffer significant monetary loss from the skimming of gift cards.
The present disclosure, and the claims that legally define the invention hereof, provide a novel and unobvious solution to eliminate skimming.